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British Steel 09:56 - May 22 with 1784 viewsStokieBlue

A sad state of affairs but what are peoples opinions on nationalising it?

I know it's an ideological point for Labour but does it have merit? Of course the saving of 5000 + 20000 jobs is a huge thing but it's likely to be the first of many public cash injections which are required along with the moving of decommission bills from private to public which could be upwards of 1bn.

The most astonishing fact I saw yesterday was that China had produced more steel in the last two years than Britain has produced in it's entire industrial history. That's insane if you think about how much was used since Victorian times.



I'm not sure it's even worth trying to compete with that economy of scale (and the numbers are even more in China's favour post 2014).

SB

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British Steel on 10:05 - May 22 with 1771 viewsSteve_M

No, can't see how that makes any fundamental change to the underlying factors here. Tories blaming the EU for state aid rules here is naked political opportunism, state aid is a bad thing for economies (see for example Amazon's pursuit of a location for it's second headquarters, basically a demand fro freebies from local authorities).

I think there is a case for bringing the railways back into state control as franchises expire, it's obvious that the current franchise system isn't working and the water industry is an exercise in carting money offshore so there is no justification for that not being nationalised.

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British Steel on 10:08 - May 22 with 1757 viewsSwansea_Blue

British Steel on 10:05 - May 22 by Steve_M

No, can't see how that makes any fundamental change to the underlying factors here. Tories blaming the EU for state aid rules here is naked political opportunism, state aid is a bad thing for economies (see for example Amazon's pursuit of a location for it's second headquarters, basically a demand fro freebies from local authorities).

I think there is a case for bringing the railways back into state control as franchises expire, it's obvious that the current franchise system isn't working and the water industry is an exercise in carting money offshore so there is no justification for that not being nationalised.


I think you've got a point, but there's nearly 40 years of conditioning that has to be undone before people will accept and vote for a government that wants to renationalise things. That's a huge challenge. Quite right that the current system doesn't work and results in a bad deal for the customers though.

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British Steel on 10:09 - May 22 with 1755 viewsNo9

According to the news this morning the loss of jobs associated with British steel chain of suppliers , sub-suppliers etc, means 20k jobs are at risk. I don't know if that is accurate but it is likley that in an area like Scunthorpe the jobs associated with a major corpration is likely to be very large.

Steel is not just steel and the headlines don't differentiate between types and grades.

Another factor is the procurement process which is not in weeks or even months but often in years.

Chinese steel is not very good at all, if you are engneering a major project (rail, bridges etc) certain types are needed acccording the the engineers design & specification.

If you want to see how much buying bad steel can cost look at what it cost the American corp Fluor in court cases, compensation etc.
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British Steel on 10:16 - May 22 with 1738 viewsStokieBlue

British Steel on 10:09 - May 22 by No9

According to the news this morning the loss of jobs associated with British steel chain of suppliers , sub-suppliers etc, means 20k jobs are at risk. I don't know if that is accurate but it is likley that in an area like Scunthorpe the jobs associated with a major corpration is likely to be very large.

Steel is not just steel and the headlines don't differentiate between types and grades.

Another factor is the procurement process which is not in weeks or even months but often in years.

Chinese steel is not very good at all, if you are engneering a major project (rail, bridges etc) certain types are needed acccording the the engineers design & specification.

If you want to see how much buying bad steel can cost look at what it cost the American corp Fluor in court cases, compensation etc.


That is true with regards to the jobs but is that justification for nationalising the company? Could't the same argument be made for anything? Even Jamie Oliver's group employs 1000+ people.

The Chinese manufacture all grades of steel so I'm not sure that's a fair point. If the UK's was so much better then British Steel wouldn't be going out of business.

I'm just not sure it's a good candidate for nationalisation given the circumstances. I also fully understand that it's going to decimate Scunthorpe though and many lives so i can see that argument as well.

SB

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British Steel on 10:19 - May 22 with 1733 viewsNo9

British Steel on 10:05 - May 22 by Steve_M

No, can't see how that makes any fundamental change to the underlying factors here. Tories blaming the EU for state aid rules here is naked political opportunism, state aid is a bad thing for economies (see for example Amazon's pursuit of a location for it's second headquarters, basically a demand fro freebies from local authorities).

I think there is a case for bringing the railways back into state control as franchises expire, it's obvious that the current franchise system isn't working and the water industry is an exercise in carting money offshore so there is no justification for that not being nationalised.


The rail sell off was probably the biggest act of theft of taxpayer assets ever perpetrated by any political party.
Had the facilitation of that amount of taxpayer money been transferred from the state to private pockets by any other party the media would have had field day, as it is the distastes & profiteering is largely overlooked.

The Dutch franchise with is many financial backers show just how easy it must be to make money with the taxpayer taking the risk.
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British Steel on 10:27 - May 22 with 1706 viewsGuthrum

British Steel on 10:16 - May 22 by StokieBlue

That is true with regards to the jobs but is that justification for nationalising the company? Could't the same argument be made for anything? Even Jamie Oliver's group employs 1000+ people.

The Chinese manufacture all grades of steel so I'm not sure that's a fair point. If the UK's was so much better then British Steel wouldn't be going out of business.

I'm just not sure it's a good candidate for nationalisation given the circumstances. I also fully understand that it's going to decimate Scunthorpe though and many lives so i can see that argument as well.

SB


Given that parts of UK foreign policy are shaped by trying to sustain employment at BAE Systems (in the face of very negative publicity), then it should not be hard to justify a relatively inexpensive* policy shift to prop up British Steel.

* £30m is peanuts in the grand scheme of government expenditure and would be far exceeded by the hit to the DWP budget if 20,000 people lost their jobs (with little prospect of swift replacement).

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British Steel on 10:29 - May 22 with 1696 viewsStokieBlue

British Steel on 10:27 - May 22 by Guthrum

Given that parts of UK foreign policy are shaped by trying to sustain employment at BAE Systems (in the face of very negative publicity), then it should not be hard to justify a relatively inexpensive* policy shift to prop up British Steel.

* £30m is peanuts in the grand scheme of government expenditure and would be far exceeded by the hit to the DWP budget if 20,000 people lost their jobs (with little prospect of swift replacement).


I agree that the initial cost is small.

It's the ongoing and unknown cost that would be large. They were talking about decommissioning costs running towards the billions last night although it's perhaps likely the public purse would have had to fund those anyway.

SB

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British Steel on 10:36 - May 22 with 1669 viewsNo9

British Steel on 10:16 - May 22 by StokieBlue

That is true with regards to the jobs but is that justification for nationalising the company? Could't the same argument be made for anything? Even Jamie Oliver's group employs 1000+ people.

The Chinese manufacture all grades of steel so I'm not sure that's a fair point. If the UK's was so much better then British Steel wouldn't be going out of business.

I'm just not sure it's a good candidate for nationalisation given the circumstances. I also fully understand that it's going to decimate Scunthorpe though and many lives so i can see that argument as well.

SB


Chinese do make different sorts of steel, I refer you to my comment about Fluor.
The service industries you mention are normally low investment thousand rather than rens of millions. BS employment and supply chain is located in a small area so the local impact is severe.
Jamie Olivers loss is over a much larger area - the local impact, while not welcome, will be less.

If the UK leave the EU the case for nationalisation is not as strong as it is if the UK leaves the EU.

Steel procurement is an interesting subject, no doubt BS problems are created by a shrinking order book so they are unable to see it much improving in the future.

The UK government since 2010 has much to answer for.
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British Steel on 10:39 - May 22 with 1658 viewsSteve_M

British Steel on 10:08 - May 22 by Swansea_Blue

I think you've got a point, but there's nearly 40 years of conditioning that has to be undone before people will accept and vote for a government that wants to renationalise things. That's a huge challenge. Quite right that the current system doesn't work and results in a bad deal for the customers though.


True and I'm not in favour of nationalising industry for ideological reasons: it's a pointless cost to spend unless there is good reason for it (I'm not much more in favour of privatisation for ideological reasons for that matter).

I think those two examples would be relatively uncontroversial though. The FT for example has done quite a bit of reporting on the failings of the water industry (for customers) over the last couple of years and a rail network that needs so much state direction is never truly private anyway - it just results in public subsidy to those companies involved.

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British Steel on 10:41 - May 22 with 1655 viewshomer_123

Two points:

1. It doesn't surprise me re. China's Steel Production compared to our output totality. You only have to look at what China produces for its own large scale development and growth programmes and what it puts on the wider steel market

2. British Steel - sadly, is a failing business. Whilst there are very good and fundamental arguments for it to be nationalised and save jobs both directly and indirectly - there is a reason it's failing and if it cannot be sustained as a business in its own right, the long term implications for nationalising it could be huge, from decommissioning to continuing to prop up a failing business. Lots of talk about how British Steel could have been saved if the Govt had used British Steel on UK projects - yes, that's true it would have helped but is that within the long term interest of the company and government.

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British Steel on 10:47 - May 22 with 1636 viewsBrianTablet

British Steel on 10:41 - May 22 by homer_123

Two points:

1. It doesn't surprise me re. China's Steel Production compared to our output totality. You only have to look at what China produces for its own large scale development and growth programmes and what it puts on the wider steel market

2. British Steel - sadly, is a failing business. Whilst there are very good and fundamental arguments for it to be nationalised and save jobs both directly and indirectly - there is a reason it's failing and if it cannot be sustained as a business in its own right, the long term implications for nationalising it could be huge, from decommissioning to continuing to prop up a failing business. Lots of talk about how British Steel could have been saved if the Govt had used British Steel on UK projects - yes, that's true it would have helped but is that within the long term interest of the company and government.


I guess it depends hugely on the definition of 'long term interest'

To create jobs for people?
To improve the country's infrastructure?
To create a tax and spend system that benefits the majority?

Or, as I imagine is the general definition nowadays, it's to make profit for shareholders.

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British Steel on 10:51 - May 22 with 1627 viewsNo9

British Steel on 10:41 - May 22 by homer_123

Two points:

1. It doesn't surprise me re. China's Steel Production compared to our output totality. You only have to look at what China produces for its own large scale development and growth programmes and what it puts on the wider steel market

2. British Steel - sadly, is a failing business. Whilst there are very good and fundamental arguments for it to be nationalised and save jobs both directly and indirectly - there is a reason it's failing and if it cannot be sustained as a business in its own right, the long term implications for nationalising it could be huge, from decommissioning to continuing to prop up a failing business. Lots of talk about how British Steel could have been saved if the Govt had used British Steel on UK projects - yes, that's true it would have helped but is that within the long term interest of the company and government.


"British Steel could have been saved if the Govt had used British Steel on UK projects - yes, that's true it would have helped but is that within the long term interest of the company and government."

Isn't the real question "How important is the balance of payments" on imports exports?

We now have a very serious deficit which is likely to get worse, how serious is it to the country & when do others do when they start to believe we can't pay our way?
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British Steel on 10:52 - May 22 with 1626 viewsGuthrum

British Steel on 10:29 - May 22 by StokieBlue

I agree that the initial cost is small.

It's the ongoing and unknown cost that would be large. They were talking about decommissioning costs running towards the billions last night although it's perhaps likely the public purse would have had to fund those anyway.

SB


Given the large and ongoing cost of benefits for the unemployed (could be £20m to £30m per month for 20k households), even a modest regular input would be a saving. On top of that are, as you say, decommissioning costs and the investment needed to bring new employers into the area.

As I understand things, it isn't possible to mothball steel furnaces. Letting them cool off completely damages the crucibles, so once shut down, that capacity is lost and would need rebuilding from scratch. So it may well be cheaper to sustain production at a low level than allowing it to stop and facing large expenditure later (even a private company coming in would demand large subsidies/sweeteners/tax breaks).

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British Steel on 10:54 - May 22 with 1619 viewsBangor31

British Steel on 10:16 - May 22 by StokieBlue

That is true with regards to the jobs but is that justification for nationalising the company? Could't the same argument be made for anything? Even Jamie Oliver's group employs 1000+ people.

The Chinese manufacture all grades of steel so I'm not sure that's a fair point. If the UK's was so much better then British Steel wouldn't be going out of business.

I'm just not sure it's a good candidate for nationalisation given the circumstances. I also fully understand that it's going to decimate Scunthorpe though and many lives so i can see that argument as well.

SB


not sure when it gets to the big stuff but i can tell you for free that British steel is far superior for fencing whether it be chicken wire or park fencing. costs about 40% more though
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British Steel on 10:58 - May 22 with 1615 viewshomer_123

British Steel on 10:47 - May 22 by BrianTablet

I guess it depends hugely on the definition of 'long term interest'

To create jobs for people?
To improve the country's infrastructure?
To create a tax and spend system that benefits the majority?

Or, as I imagine is the general definition nowadays, it's to make profit for shareholders.


I think, as detailed below, there are good cases to nationalise the likes of the rail and water - steel production though is a little different.

We could end up propping up a hugely expensive business for very little benefit - whilst there are benefits for keeping both direct and indirect jobs and I am less convinced that having British Steel will help with our own countries infrastructure.

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British Steel on 11:21 - May 22 with 1569 viewsGuthrum

British Steel on 10:58 - May 22 by homer_123

I think, as detailed below, there are good cases to nationalise the likes of the rail and water - steel production though is a little different.

We could end up propping up a hugely expensive business for very little benefit - whilst there are benefits for keeping both direct and indirect jobs and I am less convinced that having British Steel will help with our own countries infrastructure.


The question is whether it is cheaper for the government to prop up British Steel than to throw a very large number of households onto the benefits system with little short-term prospect of those jobs being replaced.

As I mentioned below, UC for 20k households (employees of the plant itself and of subcontractors/suppliers) is likely to be in the region of £20m to £30m per month (£240m to £360m per year). That's a big sum - dwarfing the recent BS annual losses of £80m.

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British Steel on 11:38 - May 22 with 1545 viewshomer_123

British Steel on 11:21 - May 22 by Guthrum

The question is whether it is cheaper for the government to prop up British Steel than to throw a very large number of households onto the benefits system with little short-term prospect of those jobs being replaced.

As I mentioned below, UC for 20k households (employees of the plant itself and of subcontractors/suppliers) is likely to be in the region of £20m to £30m per month (£240m to £360m per year). That's a big sum - dwarfing the recent BS annual losses of £80m.


Agreed Guthers but then, how far do you take that with other companies?

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British Steel on 11:57 - May 22 with 1511 viewsGuthrum

British Steel on 11:38 - May 22 by homer_123

Agreed Guthers but then, how far do you take that with other companies?


As far as you like. If subsidising business is saving the country money they would otherwise be spending on benefits, what good reason is there not to do it?

Obviously, there will be a balance point, where the potential price in benefits no longer outweighs the cost of subsidisation. Or there may be sufficient alternative jobs for workers to go to. But up to that point, the government is saving money.

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British Steel on 12:04 - May 22 with 1500 viewsGeoffSentence

British Steel on 10:09 - May 22 by No9

According to the news this morning the loss of jobs associated with British steel chain of suppliers , sub-suppliers etc, means 20k jobs are at risk. I don't know if that is accurate but it is likley that in an area like Scunthorpe the jobs associated with a major corpration is likely to be very large.

Steel is not just steel and the headlines don't differentiate between types and grades.

Another factor is the procurement process which is not in weeks or even months but often in years.

Chinese steel is not very good at all, if you are engneering a major project (rail, bridges etc) certain types are needed acccording the the engineers design & specification.

If you want to see how much buying bad steel can cost look at what it cost the American corp Fluor in court cases, compensation etc.


Paul Hurst rolls into Scunthorpe, and this happens.

Is there no end to the damage this bloke does.

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British Steel on 12:08 - May 22 with 1498 viewsfooters

Probably Judas Priest's best album.

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British Steel on 12:09 - May 22 with 1492 viewsNo9

British Steel on 12:04 - May 22 by GeoffSentence

Paul Hurst rolls into Scunthorpe, and this happens.

Is there no end to the damage this bloke does.


Forgot that
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